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VAT / Sales Tax - Case Laws
Showing 661 to 680 of 27514 Records
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2023 (5) TMI 801
Seeking condonation of delay in filing revision - whether any plausible reason has been indicated by the revisionist in filing the instant revisions? - HELD THAT:- The delay in filing revision has been considered by this Court in Sales/Trade Tax Revision Defective No.6 of 2020 Commissioner Commercial Tax U.P. Lko. Vs. M/s. R.C. & Sons., Rakabganj, Lucknow [2022 (9) TMI 533 - ALLAHABAD HIGH COURT], with other connected defective revisions, decided on 7.9.2022, where the delay of 163 days was sought to be explained on the basis of the casual and lethargic attitude of the officials which prevails in the Department, on the part of the Officers concerned.
The time limitation for filing of Revision against order impugned is 90 days from the date of communication of the order. Despite receiving impugned judgment and order on 25.07.2011, there is no explanation as to why the revision itself, was preferred even two years & four months thereafter in December, 2013. All these facts indicate the casual and cavalier attitude on the part of the department in filing of the revision belatedly, rather, as observed by the Apex Court in the case of Central Tibetan Schools [2021 (2) TMI 1214 - SUPREME COURT] other than the lethargy and incompetence of the revisionist, there is nothing which has been brought on record to explain the delay.
Keeping in view the aforesaid discussion including the judgments of the Apex Court in the cases of Living Media India Ltd [2012 (4) TMI 341 - SUPREME COURT], Central Tibetan Schools [2021 (2) TMI 1214 - SUPREME COURT] & Volex Interconnect [2021 (10) TMI 897 - SUPREME COURT], all judgments being of a latter date to the judgments cited by learned counsel for the revisionist including the judgment of Central Tibetan Schools being a three judges judgment, the Court does not find any plausible or cogent reason for condoning the delay.
The application for condonation of delay and consequently the revision itself is dismissed.
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2023 (5) TMI 753
Levy of additional tax - valuation - works contract - deduction of depreciation on machinery and tools - claiming of excess deductions on account of expenses and profit elements or not - HELD THAT:- It is crystal clear that notwithstanding the fact that there was no specific provision in the Act, 2003 qua deduction of depreciation in plant and machinery while computing taxable turnover on works contract at the relevant time still, keeping in view the principles as laid down in Gannon Dunkerley & Co.’s case [1992 (11) TMI 254 - SUPREME COURT] which had been interpreted by different High Courts in the above cited authorities, the said provision is to be interpreted to mean that the deduction for a claim in the nature of depreciation on account of use of plant and machinery was in contemplation of the discussion before Apex Court in Gannon Dunkerley & Co.’s case. We also consider it relevant to mention here that the principles of law as laid down in Gannon Dunkerley & Co.’s case were not discussed in Thampi & Company’s case [2009 (6) TMI 960 - KERALA HIGH COURT]. Therefore, the Tribunal while allowing the appeal filed by the respondent-assessee and allowing deduction on account of depreciation of plant and machineries made by the respondent-assessee by observing that the said deduction would cover charges for obtaining on hire or otherwise machineries of the assessee cannot be held to be at any fault and therefore the order passed by the Tribunal deserves to be upheld. Since this question of law had been raised in all the five instant appeals, therefore, the same stands answered in favour of the respondents-assesses of these appeals and against the appellant.
Appeal dismissed.
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2023 (5) TMI 744
Levy of Sales Tax - consideration passed through credit notes - credit note issued by a manufacturer to a dealer of automobiles in consideration of the replacement of a defective part in the automobile sold pursuant to a warranty agreement being collateral to the sale of the automobile.
Whether the judgment of this Court in MOHD. EKRAM KHAN & SONS VERSUS COMMISSIONER OF TRADE TAX, UP. (AND ANOTHER APPEAL) [2004 (7) TMI 341 - SUPREME COURT] calls for reconsideration in terms of the Reference Order dated 05.12.2019?
HELD THAT:- In Mohd. Ekram Khan, this Court distinguished the judgment in PREMIER AUTOMOBILES VERSUS UOI. [1971 (11) TMI 159 - SUPREME COURT] by holding that the fact situation there was different and the issues in the said case were also different by observing that one of the issues was, whether, the expenses on account of warranty and statutory bonus were to be excludable while working out the ex-works cost. It was noted therein that car manufacturers furnish warranty covering the cars sold by entering into an agreement with the manufacturers of components providing for a warranty so far as the components supplied are concerned. The whole object behind the warranty is that the consumer who has to make a heavy investment for the vehicle should be assured of a proper performance of the vehicle in a trouble-free manner for a reasonable length of time. Therefore, entire cost of warranty was to be borne by the manufacturer.
Referring to Prem Nath Motors, it was observed in Mohd. Ekram Khan that the said case dealt with transfer of property in the part or parts replaced in pursuance of a stipulation or a warranty which is a part of the original sale of the car for the price fixed and received from the buyer or consumer. It was observed that the price so fixed and received was a consolidated price for the car and the parts that may have to be supplied by way of replacement in pursuance of the warranty. It was observed by this Court that the decision in Prem Nath Motors did not apply to the controversy in Mohd. Ekram Khan.
This Court in Mohd. Ekram Khan distinguished the factual situation in Premier Automobiles and COMMISSIONER OF SALES TAX, DELHI ADMINISTRATION, VIKAS BHAWAN, NEW DELHI VERSUS PREM NATH MOTORS (P.) LTD. [1978 (5) TMI 108 - DELHI HIGH COURT]. In other words, after distinguishing the aforesaid cases, it was noted that “in a case the manufacturer may have purchased from the open market parts for the purpose of replacement of the defective parts. For such transaction, it would have paid taxes. The position is not different because the assessee had supplied the parts and had received the price.” In other words, in Mohd. Ekram Khan, a situation where a manufacturer has purchased the part from the open market for the purpose of replacement of the defective part and for which taxes have been paid by the manufacturer and a situation where the dealer/assessee supplies the part from his own stock and has received the price for the same in the form of credit note on return of the spare part to the manufacturer have been considered to be not different to each other, but the same.
Whether, this Court in Mohd. Ekram Khan was right in equating both the factual situations and holding that in the latter case, the dealer was liable to pay sales tax on the premise that the transaction between the manufacturer and dealer was one of sale? - HELD THAT:- The entire controversy must be viewed in the perspective of a composite transaction and not in isolation as the dealer (assessee) would be acting under a warranty with there being a manufacturer on one end and the purchaser or customer of an automobile at the other end and the dealer acting on behalf of the manufacturer or an intermediary between the said customer and manufacturer. The said transaction cannot be viewed in a myopic sense by truncating or excluding the role or action of a dealer under the warranty and viewing it only from the perspective of a transaction simpliciter between manufacturer and a dealer. Such an approach is not only skewed from a commercial perspective but also jurisprudentially or in the legal sense. There need not be a reiteration of the significance of a warranty in a transaction of a sale of goods.
When the transaction between the manufacturer and dealer is viewed in the larger canvas of a dealer discharging his obligations pursuant to a warranty appended to a sale of an automobile, the same cannot be narrowly construed. At the same time, whether the transaction resulting in payment by way of a credit note to a dealer/assessee is a sale within the definition of sale under the Sales Tax Acts of the respective States under consideration has to be considered.
The aforesaid discussion could be illustrated better with reference to STATE OF TAMIL NADU VERSUS SRI SRINIVASA SALES CIRCULATION (AND OTHER APPEALS) [1996 (10) TMI 379 - SUPREME COURT].
Applying the aforesaid principles and the judgment of this Court to the case at hand, it is noted that when the dealer uses one of the spare parts from his stock for the replacement of a defective part in an automobile under a warranty, he is given a monetary benefit in the form of a credit note. The definition of “credit note” from various dictionaries and Law Lexicons have been adverted to above. A perusal of the aforesaid definitions would clearly indicate that a credit note issued by a manufacturer in favour of a dealer is a valuable consideration within the meaning of the definition of “sale” under both, Central Sales Tax Act as well as the respective State enactments under consideration - No doubt, cash is a money consideration but the definition of “sale” under the Central Sales Tax Act as well as under the State enactments does not imply price to mean only a money consideration in a narrower sense but in a wider sense to include different forms of money consideration such as deferred payment and also a valuable consideration which need not be restricted to cash or deferred payment only but a valuable consideration which would include a credit note which is to be read within the definition of “price”.
A credit note is a valuable consideration which is essentially a document to inform a buyer that the buyer’s account is being credited because of errors, returns or allowances. - Merely because the dealer is acting as an intermediary or on behalf of the manufacturer pursuant to a warranty and receives a recompense in the form of a credit note, the same cannot escape liability of tax under the Sales Tax Acts under consideration.
The manufacturer gives the warranty to the consumer by making a representation with regard to the automobile. It is in the nature of a promise which the dealer assessee carries out on behalf of the manufacturer.
The value of the credit note is a valuable consideration received which is in the nature of a benefit from the manufacturer which is exigible to tax. If the dealer had sold a spare part of the automobile from his stock to any other consumer across the counter, he would have collected the requisite sales tax along with the price from that consumer but in the instant case, the consideration is received in the form of a credit note from the manufacturer which is subject to sales tax. The person who pays the valuable consideration in a sale transaction is irrelevant so long as it is paid.
Application of Indian Contract Act, 1872
Applying the definitions of Section 2(d) of the Indian Contract Act, 1872 to the facts of the present case, it would mean that as between the manufacturer of the automobile, the dealer and the customer, the manufacturer is the promisor who makes the proposal to recompensate the dealer when pursuant to a warranty clause, the dealer replaces a spare part from out of his own stock or by buying the same from the open market or from the manufacturer of the spare part. Thus, the dealer is the promisee. The occasion to replace the spare part is when the customer brings to the notice of the dealer a defect in a part of the automobile, pursuant to a warranty which has been given by the manufacturer to the customer.
The dealer (promisee) agrees to replace a defective part which is a consideration for the promise and in turn, receives a recompense in the form of a credit note from the manufacturer. Thus, there is an agreement between the manufacturer and the dealer, and it would be in an instance of there being reciprocal promises.
Conclusion:
The transaction between the manufacturer and dealer while acting pursuant to a warranty in the circumstances explained above has to be construed as sale within the meaning and definition of sale under the Sales Tax Acts under consideration.
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2023 (5) TMI 717
Taxability - sale of old cars - incidental & ancillary to the business of the appellant-assessee and covered under the definition of ‘business” as defined under Section 2 (c) of Punjab VAT Act, 2005 or not - imposition of penalty without proving any mens-rea on the part of the appellant - charging of interest when there is no mens-rea on the part of the appellant and tax has been paid as per returns.
Whether the sale of old car and freight received through Transport Union, can be added to the taxable turnover of the assessee?
HELD THAT:- In the above said case, it was held that sale of discarded and unserviceable items was intended only for reduction of the space and to save accommodation. The said sale was not integrated with (or connected with) the main business even, if, the same was of considerable volume and frequency. - the amount received from the sale of old cars cannot be included in the taxable income of the assessee.
Levy of penalty - demand against wrongly claimed ITC - HELD THAT:- Before the Tribunal, learned counsel for the assessee-appellant had stated that he had wrongly claimed ITC on items bearing Nos. 41 to 59 as mentioned in Form VAT-24 and customer-wise summary. In view of the said fact, the appellant was not held entitled to claim ITC on the said items - Once, the assessee had himself admitted his mistake, whether penalty of Rs. 16,02,484/- under Section 56 of the Act can be imposed along with interest of Rs. 5,52,857/-.
On this issue, reference can be made to a judgment passed by in COMMISSIONER OF INCOME-TAX VERSUS RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT], wherein, Hon’ble the Supreme Court was examining a case of imposition of penalty under Section 271 (1) (c) of the Income Tax Act. The assessee had claimed incorrect expenditure in his return. In that case, it was held that Tribunal, as well as, the Commissioner of Income-tax (Appeals) and the High Court have correctly reached this conclusion as where there is no finding that any details supplied by the assessee in its return are found to be incorrect or erroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars.
Ratio of the aforesaid judgment is directly applicable on the facts of the present case. Before the Tribunal, learned counsel for the assessee had conceded that the appellant had wrongly claimed ITC on items bearing Nos. 41 to 59 as mentioned in Form VAT-24. The benefit of this ITC was never granted by the revenue. Hence, it was not a case, where wrong information was given. Only a claim was made, which was ultimately rejected. This would not amount to an intention to claim wrong relief and attract imposition of penalty. The appeal to the extent of imposition of penalty and interest is also liable to be allowed.
Thus, the amount received from the sale of old cars cannot be included in the taxable income of the assessee. It is further held that the appellant-assessee is not liable to be penalized on claiming ITC on item Nos. 41 to 59 - appeal allowed.
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2023 (5) TMI 649
Valuation - determination of sale price of Iron Ore sold by the petitioner - average rate of neighbouring mines in exercise of the powers under Section 35(7) read with Section 30(4) of the JVAT Act - HELD THAT:- After going through the impugned order and other relevant documents placed, it appears that revised assessment proceeding of the petitioner was completed and an order has been passed whereby, in exercise of power u/s 35(7) r/w section 30(4) of the JVAT Act, tax and interest has been imposed upon the petitioner on the ground that petitioner has concealed its GTO.
After going through the proviso to Section 35 (7) of the Act it appears that the statute specifically postulates that prescribed authority shall record its reason before initiating the proceedings and no order shall be passed under this sub section without giving the dealer an opportunity to be heard. Section 35(7) contemplates of such a proceeding against an assessee regarding whom the Assessing Officer is satisfied that he has resorted to selling of goods at a higher price than shown in his invoices. Therefore, the proviso to Section 35 (7) of the JVAT Act firstly stipulates that the reasons must be recorded by the prescribed authority for initiating the proceeding and secondly, the principles of natural justice should be followed. Though in the instant case the second ingredient of the proviso has been fulfilled; however, there is no document to suggest that the assessing officer has recorded his reason before initiating the proceeding.
In the absence of any tangible materials to support such a finding, it is difficult to assume that a purchaser of petitioner would purchase minerals at a lesser price under an invoice in order to evade payment of tax especially when the said purchaser is entitled to avail ITC under the JVAT Act, 2005. It is only after recording of reasons for initiation of proceedings under Section 35(7) the exercise for determination of value of goods at the time of sale and assessment of tax on such price is to be done by giving the dealer an opportunity of being heard.
It is reiterated that recording of satisfaction is sine qua non before proceeding to impose tax and penalty upon the assessee under Section 35(7) of the JVAT Act. Any such satisfaction is to be based on tangible materials as are found by the AO as the provisions are penal in nature where an assessee is found to be indulging in tax evasion by suppression or concealment of actual sales or turnover by selling goods at a higher price than shown by him. Learned Tribunal has completely failed to consider that the requirement of law for initiating a proceeding under Section 35(7) by recording reasons has not been fulfilled by the Assessing Officer - the matter is therefore required to be remanded to the AO to comply the provisions of Section 35(7) of the Act for initiating the proceeding, if he finds any evidence that the goods have been sold at higher price than shown by the dealers.
Petition allowed by way of remand.
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2023 (5) TMI 648
Rebate on Input Tax paid on diesel - activity of crushing the boulders into gitti amounts to manufacturing (or not) and for this process, diesel is used as raw material - interpretation of Section 14(1AC) of MP VAT Act - HELD THAT:- The learned Appellate Tribunal has considered the first contention of the appellant about the activities of stone crushing is amount to manufacture or not. According to the Tribunal, the appellant is only changing the size of stones from boulder to gitti, hence, there is no change in its character by reducing the size. The manufacturing includes any activities that bring out a change in final product.
The Apex court in the case of COMMISSIONER OF SALES TAX, UP. VERSUS LAL KUNWA STONE CRUSHER (P) LTD. [2000 (3) TMI 58 - SUPREME COURT] held that Even if gitti, kankar, stone ballast, etc. may all be looked upon as separate in commercial character from stone boulders offered for sale in the market, yet it cannot be presumed that Entry 40 of the notification is intended to describe the same as not stone at all. In fact the term “stone” is wide enough to include the various forms such as gitti, kankar, stone ballast.
The above view has been affirmed in the case of STATE OF MAHARASHTRA VERSUS MAHALAXMI STORES [2002 (11) TMI 112 - SUPREME COURT] where it was held that From a perusal of the definition, extracted above, it is clear that the processes of producing, making, extracting, altering, ornamenting, finishing or otherwise processing, treating or adapting of any goods fall within the meaning of the term “manufacture”. But it may be pointed out that every type of variation of the goods or finishing of goods would not amount to manufacture unless it results in emergence of a new commercial commodity. In the instant case, the very nature of the activity does not result in manufacture because no new commercial commodity comes into existence.
Claim of ITR for the purchase of diesel - HELD THAT:- The appellant used to purchase diesel to run the crusher machine and not as a raw material to manufacture the gitti. ITR can be allowed only to the registered dealers on the purchase of goods specified in Schedule – II within the State. The appellant is not a dealer engaged in the sale or purchase of diesel, therefore, the Tribunal has not committed any error in interpreting Sections 14 and 14(1AC) of the Act of 2002. Diesel is covered in Part – III – A of Schedule – II and Part – II of Schedule – II does not cover petrol and diesel. As such, there are no errors in the finding recorded by the Assessing Authority, First Appellate Authority as well as Tribunal.
Appeal dismissed.
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2023 (5) TMI 647
Reversal of ITC - incentives / discounts received by the appellant from its vendors - attachment of bank accounts - HELD THAT:- Out of the total disputed tax of Rs.1,02,05,505/- for the assessment years in question, a sum of Rs.46,81,461/- relates to the reversal of ITC on incentives, which is covered by the judgment of the Apex Court in M/s.Jayaram & Co. case [2016 (9) TMI 408 - SUPREME COURT] wherein, the assessment orders dated 29.10.2010, with respect to reversal of input tax on incentives / discounts received by the appellant from its vendors, were set aside - After deducting the said sum of Rs.46,81,461/-, the balance sum of Rs.55,24,044/- pertaining to other issues, to which, the appellant has also filed application under Section 84 of the TNVAT Act, 2006.
Considering the total quantum covered under Section 19(20) of the Tamil Nadu Value Added Tax Act, 2006, amounts to Rs.46,81,461/-, which was set aside in the earlier round of litigation, but, the same was not taken into consideration by the learned Judge and that, if the amount so deleted, is deducted from the total disputed tax of Rs.1,02,05,505/- by way of subsequent assessment proceedings, the total outstanding amount would be around Rs.55,00,000/-, this court, to meet the ends of justice, is inclined to modify the order of the learned Judge, in the following terms:
i. The appellant shall pay a sum of Rs.25,00,000/- within a period of eight weeks from the date of receipt of a copy of the judgment;
ii. On such payment, bank attachment, if any, shall be lifted forthwith;
iii. On the failure of the appellant to comply with the direction (i) above, the interim order granted by the learned Judge shall stand vacated automatically without any reference to this court.
Appeal disposed off.
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2023 (5) TMI 646
Framing of Assessment under Section 29(2)(c) of the PVAT Act, 2005 - period 2006-2007 to 2009-2010 - it is alleged that Assessing Authority, while framing assessment under Section 29(2) had not followed the procedure laid down under Section 29(5) of the Act, 2005 - HELD THAT:- In the present case, the tax has already been deposited by the appellant as observed by the Tribunal in order dated 31.05.2018 (Annexure A-8). Moreover, on merits, after examining the order dated 01.08.2012 passed by the Deputy Excise & Taxation Commissioner, (Appeals), U.T., Chandigarh, it is found that the assessment has been made after examining documents which were recovered during the inspection from the business premises of the appellant and not as a best Judgment Assessment. Even though the ETO, who had passed the impugned order, had been allotted ward No. 1 as per notifications (Annexures A-5 and A-5/A). However, it is not the case of the appellant that ETO was not competent to pass the assessment order with regard to residents of any ward.
The Deputy Excise & Taxation Commissioner (Appeals) as well as the Tribunal had proceeded to examine the case on merits in detail and the order with respect to liability of the assessee to make payment of tax pursuant to the search conducted does not require any interference on facts as well as no substantial question of law arises to interfere with the finding of facts given by the Assessing Officer, Deputy Excise & Taxation Commissioner (Appeals) and the Tribunal. At this stage, no case is made out to remand the matter back to the concerned ETO of the ward to pass a fresh order on merits which has already been examined in detail by all the three authorities below.
Hence, no substantial question of law arises to interfere in the case on the question of jurisdiction only as this Court is of the view that the matter will not be remanded back to the concerned Assessing Officer as the documents and evidence will remain same and no second opinion could have been formed with respect to the assessment made for the assessment years 2006-07 to 2009-10.
Appeal dismissed.
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2023 (5) TMI 595
Doctrine of legitimate expectation - exemption from payment of sales tax - Vested Rights - dissenting / Split judgment - Section 2(17) of the West Bengal Sales Tax Act, 1994 which came to be amended w.e.f. 01.08.2001 vide West Bengal Finance Act, 2001, omitting “tea blending” from the definition of “manufacture”. - legitimate expectation was created by the competent authority, which lured the appellants to act in a certain manner
As per M. R. SHAH , J.
HELD THAT:- In the present case, prior to 2001, as per Section 2(17) of the Act, 1994, the activity of “tea blending” was included in the definition of “manufacture”. Therefore, being in the activity of “tea blending”, the appellants were entitled to the exemption from payment of sales tax as manufacturers. It cannot be disputed that being the manufacturer in the activity of “tea blending” the appellants would have always been entitled to the exemption from payment of sales tax. Being a manufacturer, being in the activity of “tea blending”, the appellants were availing the sales tax exemption. However, thereafter, the definition of “manufacture” as contained in Section 2(17) of the Act, 1994 came to be amended w.e.f. 01.08.2001 vide West Bengal Finance Act, 2001 and the activity of “tea blending” came to be excluded from the definition of “manufacture”. Consequently, the appellants ceased to be the manufacturers. Once the appellants ceased to be the manufacturers, the appellants shall not be entitled to the exemption from the payment of sales tax, which was available to the appellants as a manufacturer being in the activity of “tea blending”. Therefore, on and from 01.08.2001, “tea blending” activity ceased to be the manufacturing activity and the appellants ceased to be the manufacturers and therefore, on and from 01.08.2001, the appellants shall not be entitled to the exemption from payment of sales tax.
The view taken by the learned Tribunal as well as the High Court agreed upon, that on and after 01.08.2001 and in view of the amendment to Section 2(17) of the Act, 1994, by which the definition of “manufacture” is amended and “tea blending” is excluded from the definition of “manufacture”, the appellants shall not be entitled to the exemption from payment of sales tax - appeal dismissed.
As per KRISHNA MURARI, J.
HELD THAT:- The doctrine of legitimate expectation, in simple terms, is a legal principle that arises when a public authority makes a promise or acts in a manner that leads an individual or a group to expect a particular outcome. This doctrine , which flows from the doctrine of rule of law, is based on the idea of fairness and consistency in the decision-making processes of public authorities - When a legitimate expectation of a specific outcome is created by a public authority, the said public authority is required to take into account such expectation created by it when making a decision that affects the interests of the individual or group concerned. If the public authority fails to do so, the individual or group has a right to challenge the decision and seek a remedy, such as an order to enforce the legitimate expectation, as is the situation in the case at hand.
The doctrine of legitimate expectation was elaborated upon in the case of FOOD CORPORATION OF INDIA VERSUS. KAMDHENU CATTLE FEED INDUSTRIES [1992 (11) TMI 275 - SUPREME COURT], wherein, this Court held that the duty of public authorities to act in a reasonable manner, entitles every person to have a legitimate expectation to be treated in such a reasonable manner. This legitimate expectation imposed on public authorities to act in a fair manner, as has been held, is imperative to ensure non-arbitrariness of state action. It was further held by this Court that while such a legitimate expectation might not by itself be an enforceable right, however, the failure to take into account such expectation may deem a decision of the public authority to be arbitrary.
The doctrine of legitimate expectation finds its home within the doctrine of rule of law and is a limb of Article 14 that fights against the contamination of arbitrary state action and misuse of power - The doctrine of promissory estoppel and the doctrine of legitimate expectation, while they share a common root and a similar theme, by way of going through the rigours of common law, have developed into two distinct doctrines. The doctrine of promissory estoppel is a remedy in private law; however, the doctrine of legitimate expectation is a remedy in public law, and as stated above, is rooted in Article 14 of the Constitution of India.
This legitimate expectation, created by the appropriate and competent authority, was broken when a subsequent amendment was brought in, wherein the words “blending of tea” was removed from the definition of “manufacture”. Such an amendment, by removing the said words, snatched away the legitimate expectation of a specific outcome, and ousted the appellants from claiming the tax holiday, to which they were promised by the original amendment. As can be seen, a reasonable legitimate expectation was created by the competent authority, which lured the appellants to act in a certain manner. Such a legitimate expectation was then snatched away, leaving the appellants without remedy, and in losses - In the present case at hand, while perusing through the subsequent amendment, it can be clearly seen that no such appropriate justification has been provided by the government. No appropriate reason for the enactment of the amendment, nor the considerations of the affected party have been discussed. A mere claim of change of policy is not sufficient to discharge the burden of proof vested in the government. The government must precisely show what the change of policy is, and why such a change of law is in furtherance of public policy, and the public good.
It can be clearly seen that a legitimate expectation was created by the public authority, and such an expectation, accrued in the favour of the appellants herein, was rescinded by the said authority without any demonstration of public interest. No appropriate explanation has been provided as to why a shift was made in Law, and why such a shift, in spite of the loss which would occur to the appellants and similarly situated persons, was necessary to advance public interest. In such a circumstance, the legitimate expectation created in the minds of the appellants, must be protected, and the benefits given originally must be made applicable to the appellants herein for the period promised by the respondent authority.
The Authority must be held accountable to the legitimate expectation created by it, and therefore, a direction is liable to be issued to the respondents herein to extend the benefits of the original amendment to the appellants herein, till the expiry of such a benefit as per the original amendment - Appeal allowed.
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2023 (5) TMI 427
Validity of initiation of review proceedings against the Petitioner-company - absence of requisite sanction being obtained by Commissioner of Commercial Taxes, Jharkhand in terms of the provisions contained under Section 9A(4) of the Bihar Electricity Duty Act, 1948 (as adopted) read with Rules 14(10) and 14(11) of the Bihar Electricity Duty Rules, 1949 - whether the order passed by the Appellate Authority remanding the matter back to the Assessing Authority for de-novo adjudication is required to be interfered with by this Court on the ground that when the very initiation of the proceeding for review was void ab initio and nonest; no jurisdiction could have been conferred by the Appellate Authority to the Assessing Authority by passing order of remand?
The case of the Petitioner is that the very initiation of the review proceedings against the Petitioner by its Assessing Officer is contrary to the provisions of Section 9A(4) of the Electricity Duty Act read with Rules 14(10) and 14(11) of the Electricity Duty Rules, as the proceedings have been initiated by the successor in office of the original Assessing Officer without obtaining previous sanction in writing of Commissioner of Commercial Taxes, and, except for the Assessment Year 2016-17, review proceedings have been initiated beyond the period of limitation of twelve months without obtaining sanction of the Commissioner of Commercial Taxes.
HELD THAT:- According to Section 9A(4), the prescribed authority, to review an order, would be the officer who has passed the order or its successor in office. Section 9A(4) of the Electricity Duty Act is to be read with Rules 14(10) and 14(11) of the Electricity Duty Rules, which clearly prescribe that for reviewing any order other than the order passed by the Commissioner, sanction of the Commissioner in writing is required and such review cannot be made beyond the period of 12 months from the date of passing of the order sought to be reviewed, and, an order can be reviewed by the officer who is successor in office of the officer who has passed the order sought to be reviewed only with previous sanction of the Commissioner even if the order is sought to be reviewed within a period of twelve months.
Aforesaid proposition of law has been authoritatively laid down by the Coordinate Bench of this court in the case of TATA STEEL LIMITED, JAMSHEDPUR, EAST SINGHBHUM VERSUS THE STATE OF JHARKHAND, JOINT COMMISSIONER OF COMMERCIAL TAXES (ADMINISTRATION) , DEPUTY COMMISSIONER OF COMMERCIAL TAXES, COMMERCIAL TAX OFFICER, [2019 (12) TMI 1644 - JHARKHAND HIGH COURT] and the said decision was challenged by the State of Jharkhand before the Hon’ble Apex Court and their S.L.P. has also been dismissed.
There is no substance in the contention of the Respondent-State that in the case of Tata Steel Ltd, this Court remanded the matter back to the Assessing Authority for passing fresh review order. On the contrary, a bare perusal of the said order would reveal that penalty orders were set aside and it was merely recorded that this court has not stopped any authority to exercise his powers permitted under the law.
It is a trite law that an order, which is bad from its inception itself, cannot be cured by subsequent action. In the present case, before the Appellate Authority, the Judgment of this Court in the case of Tata Steel Ltd. was duly placed on record, but despite the said fact, the Appellate Authority, instead of setting aside the order of review as not sustainable in the eye of law, has remanded the matter back to the Assessing Authority for reconsideration. This cannot be endorsed, as reviewing authority cannot be clothed with jurisdiction which it, otherwise, did not have at the time of initiation of review proceedings.
The review orders dated 31.08.2020 and 12.09.2020 as well as the Appellate Orders dated 23.12.2022 in respect of the Period 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17 are set aside - Consequently, penalty amount deposited/recovered from the Petitioner-company, if any, is directed to be refunded/adjusted in future bills towards Electricity Duty.
Application allowed.
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2023 (5) TMI 375
Jurisdiction of Intelligence Officer to levy penalty - penalty proceedings initiated under Section 67 of the KVAT, 2003 - Intelligence Officer in penalty proceedings initiated under Section 67 of the KVAT, 2003 can assume the role of Assessing Officer in imposing penalty on estimation or on the basis of correct figures or not - HELD THAT:- On verification of available books, it was convincingly found that BPCL did not effect any payment other than that of Fixed Monthly Charge towards the works executed by the petitioner for setting up production plant exclusively for BPCL and beyond doubt that BOO Operator had not received any consideration for setting up the new plant and machinery exclusively for BPCL until the supply of industrial gases started. BOO operator began to issue two type invoices one for FMC for BPCL on account of Hydrogen and Nitrogen without affecting any such supply, but, for actual supply effected invoice for VC by reading the metering equipment - No doubt, the Division Bench of this Court had culled out a ratio decidendi by holding that Intelligence Officer is not empowered while initiating the proceedings under Section 61 of KVAT Act and 45A of KGST Act 1963 on the basis of guess work and estimation. It is not the case where the petitioner failed to supply the documents in response to the notices reflecting the imposition of the penalty impelling the Intelligence Officer to arrive at a proceedings on estimation.
The dictum laid down in M.K.Markar and others' case [2018 (12) TMI 481 - KERALA HIGH COURT] would definitely come into play, wherein it has been held that the role of Intelligence Officer is only to impose penalty prescribed in the Act and the matter was referred to the Assessing Officer, who would not be precluded from proceeding to arrive at best judgment on the basis of factors relevant to the activity of the dealer.
On the basis of the extracted findings of the Intelligence officer it can irresistibly be concluded, it was not a case of estimation, but based on an actual calculation by reading the contents of the agreement and the invoices. That could not be a case falling in the ratio culled out in Markar's Case where Intelligence Officer was required to refer the matter to the Assessing Officer, nor would be any force in the argument that unless and until the Assessing officer embarks upon proceedings under Section 25 b penalty proceedings cannot be initiated.
There are no force in the writ petition warranting interference under Article 226 of the Constitution of India. The petitioner, if so advised, is at liberty to assail the order impugned by filing appeal. The writ petition is accordingly dismissed.
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2023 (5) TMI 326
Taxability - gutka/gutkha/guhtka - appellants argued that state legislatures were not empowered to levy sales tax on those articles, in view of the provision in the Constitution enabling the Union to levy additional duties of excise, and further that in any case, the rate of state tax cannot exceed the limit prescribed by the Central Sales Tax Act, 1956.
HELD THAT:- Entry No. 2 of Part-J in the First Schedule to the ADE Act is similar to sub-heading 2404.49 - as amended from 01.03.2001. As a result, additional excise duty could be imposed on ''Pan Masala containing tobacco”. As far as Kothari Products Limited v. Government of Andhra Pradesh, [[1997 (7) TMI 601 - ANDHRA PRADESH HIGH COURT]] is concerned, a Full Bench of the (undivided) Andhra Pradesh High Court had examined the interface between the APGST Act, and the provisions of the CET Act, in the context of whether gudaku was subjected to sales tax levy, as the dealers had contended that it was tobacco, and therefore, exempt under the local law - The Full Bench ruling considered the local enactments, and sub-headings in Chapters 21 and 24 of the CET Act, and held that although gutkha falls within the term ‘pan masala’, since no additional duty of excise is levied on it, yet it could not be held that gutkha was exempt from state sales tax.
It was held by the Full Bench of the Andhra Pradesh High Court [[1997 (7) TMI 601 - ANDHRA PRADESH HIGH COURT]] that provisions of explanation of the Fourth Schedule to the APGST Act, with reference to the heads and sub-heads in the CET Act, what was relevant in ascertaining the real import of the expression “chewing tobacco and preparations containing chewing tobacco” was the breadth of the terms used in the entry, sub-heading or a notification, or statute. From that aspect, the court concluded that gutkha fell within the wide language of the said expression. However sub-heading 2404.40 “Chewing tobacco and preparations containing chewing tobacco” was a general sub-head.
The court concluded that it is a settled rule of interpretation that a specific reference prevails over a general entry. Since the court held that “gutkha” fell within the meaning of “pan masala” in the sub-heading 21.06, there could be no doubt that “pan masala” was a specific sub-head even assuming that it falls within the meaning of “chewing tobacco”. Therefore, the court concluded that in view of the specific head “pan masala” in Chapter 21, that item was excluded from the general sub-head 2404.40 “Chewing tobacco and preparations containing chewing tobacco”. The court also concluded that though “gutkha” fell within the term “pan masala” in Chapter 21 under sub-head 21.06 yet as it is not subjected to additional duty, an essential condition envisaged by the explanation for claiming exemption, is lacking.
Whether pan masala was an exempted item, being “tobacco”? - HELD THAT:- It is noticeable that pan masala was expressly mentioned in Chapter 21 for the first time, in 1995 in the CET Act. Note 3 defined 'Pan Masala' as “any preparation containing betel nuts and any one or more of the following ingredients, namely lime, katha (catechu) and tobacco, whether or not containing any other ingredients”. However, at the same time, Chapter 24 contained a specific entry “tobacco” which enumerated tobacco, manufactured tobacco, substitutes etc. The relevant sub-heading at that time was 2404.41 which enumerated chewing tobacco, including preparations commonly known as khara masala, kimam, dokta, zarda, sukha and surti. Thus, the CET Act itself made a distinction between pan masala - whether it contained tobacco, or not, and all forms of tobacco. Right from 1995, the distinction in the CET Act between pan masala (Chapter 21) and tobacco (Chapter 24), had been made. The definition of pan masala also clarified that despite one of its ingredients being tobacco, it would nevertheless be a separate article.
On a plain application of the interpretive rules, especially Rule 3(a) it is clear that the heading which provides the most accurate description has to be followed. In the present case, there is no doubt, that before 2001, pan masala and gutkha fell within Chapter 21, as pan masala, regardless of whether they contained tobacco. Goods classifiable under Chapter 24, i.e. tobacco items were more general; also they did not include pan masala.
Rate of tax - HELD THAT:- In view of the restrictions under Section 15 CST Act, neither gutkha nor pan masala were “declared goods” under Section 14 of the CST Act. The amendment to the CET Act did not become part of Section 14(ix). The goods under the relevant sub-headings of the CET Act were absent in the list of declared goods of the CST Act; they were not part of the provisions introduced to the Finance Act, 1988. Therefore, the subsequent changes made introducing 2404.40 in the CET Act do not affect or change the CST Act. Consequently gutkha and pan masala are not covered under sub-heading 2404.40 so far as CST Act is concerned. Resultantly the arguments of the assessees that the rate of local tax, cannot exceed the limit under the CST Act, are rejected as unmerited.
The appeals by the assessees have to fail. The revenue’s appeals are consequently allowed.
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2023 (5) TMI 325
Levy of penalty u/s 51(7)(b) of the Punjab VAT Act - evasion of tax or not - Designated Officer was of the view that the documents were not genuine and there had been an attempt to evade tax - HELD THAT:- In the impugned order as well, it has been observed that the goods were being brought into Punjab by M/s Mundawala Enterprises of Abohar and goods were meant for trade. Merely on the ground that the information with respect to goods carried in the vehicle has not been given before the Officer Incharge of the check post or ICC, the impugned order could not have been passed.
This issue has already been considered by this Court in Shree Ram Panel’s case [[2011 (8) TMI 1027 - PUNJAB AND HARYANA HIGH COURT]] where it was held that mere non-reporting at the ICC. Banur and not making declaration in the prescribed form could not lead to conclusion that there was violation of Section 51(4) of the Punjab Value Added Tax Act with a view to do an attempt to evade tax.
In the present case, except for giving information to ICC, all other documents shows that the appellant was not attempting to evade tax.
Penalty set aside - petition allowed.
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2023 (5) TMI 290
Classification of goods - medicated talcum powder - classifiable under Entry 79 of the First Schedule to Kerala General Sales Tax Act, 1963 or not - whether medicated talcum powder is medicine or drug, or a cosmetic, or in terms of the statutes in question, medicated talcum powder? - HELD THAT:- In the present case, the clear legislative intent, of inserting a carefully worded entry, which was a “hybrid” one, i.e. describing an article that contained medicinal ingredients, as well as those used for cosmetics, and yet placing such a creature (“neither beast nor fowl” so to say) in the category of cosmetics, ruled out altogether any interpretive scope of classifying it as a medicinal preparation, or drug or medicine. Therefore, this court cannot fault the High Court for drawing the conclusion that it did.
Tamil Nadu case [[2014 (5) TMI 413 - MADRAS HIGH COURT]] - HELD THAT:- The legislative history of the entry is telling. Talcum powder, lipsticks, lip salve, nail polish, nail varnishes, nail brushes, toilet powders, baby powders, talcum powders, powder pads, etc. clearly showed that all manner of talcum powder fell within Entry, i.e. Item 1. After the amendment, with effect from 01.04.1994, the explanation was added. The explanation specifically stated that items “listed above” “even if medicated or as defined in Section 3” (of the Drugs Act) “or manufactured on the license issued under the said Act will fall under this item”. The explanation included, in Item 1, Part F medicated talcum powder, regardless that the license to manufacture it, was under the Drugs Act. The pointed reference to toilet powders, baby powders, talcum powders, powder pads, along with the additional words “even if medicated” again, like in the Kerala case, is decisive.
In the present case, the TNGST was consciously amended to include talcum powder, whether or not medicated in the specific entry or class of entries, enumerating cosmetics. Hence, like in the Kerala case [[2008 (9) TMI 845 - KERALA HIGH COURT]], the plain meaning of that taxation head or entry had to be given, as there was no ambiguity. Consequently, the findings recorded by the High Courts are justified.
This court is of the view that both sets of appeals have to fail - Appeal dismissed.
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2023 (5) TMI 235
Adjustment of Refund with the dues - statutory refund pertaining to the year 2011-2012 available to the Petitioner was adjusted towards the statutory dues payable by the Petitioner for the year 2010-2011 purportedly without notice - HELD THAT:- By communication dated 12 April 2019, Petitioner had informed the Respondent Authorities that it was desirous of availing the benefit of the Amnesty Scheme and therefore, it had withdrawn the intimation made in Form-314 of its intention to file an appeal against the order for the year 2010-2011 and had also requested that refund of Rs. 10,69,89,606/- for the year 2011-2012 be kept on hold till filing of its application under the Amnesty Scheme. It is not in dispute that against the said communication there was no response from the Respondent Authorities. The Petitioner filed an application under the Amnesty Scheme on 13 May 2019 by making a payment of Rs. 8,46,84,821/-. No objection to the communication dated 12 April 2019 or any response to the fact of the request made by the Petitioner to keep the refund on hold was communicated to the Petitioner by the Respondent Authorities.
The Defect Notice and the Refund Adjustment Order are apart only by a day and this could not have provided sufficient opportunity to the Petitioner even to seek redressal of his grievance from the Authorities. Even while the Authorities had not responded to the communication dated 12 April 2019 of the Petitioner, whereby the Petitioner had requested the Authorities to keep the refund amount on hold as they were in the process of filing an application under the Amnesty Scheme, the Respondent Authorities, in our view, could not have, while the application for the Amnesty Scheme was under consideration in the absence of any response to the erstwhile Petitioner's communication dated 12 April 2019 gone ahead without any notice to the Petitioner and adjusted the refund amount for the year 2011-2012 against the dues for the year 2010-2011 and that too when the Petitioner had already filed the application under the Amnesty Scheme which was accepted by the Respondent Authorities alongwith the payment of Rs. 8,46,84,821/-under the said scheme.
Non communication of any stand with respect to the Petitioner's communication dated 12 April 2019 to keep the refund for the year 2011-2012 on hold led the Petitioner to believe that the request to keep the refund on hold was accepted. And based on this belief Petitioner went ahead and took an irretrievable decision including filing of the application dated 13 May 2019 under the Amnesty Scheme - serious prejudice has also been caused to the Petitioner by the Respondent Authorities in not putting the Petitioner to notice of the adjustment that was effected pursuant to the Refund Adjustment Order.
In the face of such objectives of the Amnesty Scheme, the State cannot submit in its affidavit or the AGP cannot be heard to be arguing that just because of the communication dated 12 April 2019 pursuant to which the Petitioner withdrew the intimation to file an appeal in respect of the year 2010-2011 where the dues were Rs. 14,00,74,890/-, that the said amount became available for recovery from 12 April 2019. In our view, such an approach by the State clearly militates against the objectives of the Amnesty Scheme - in view of the breach of the principles of natural justice, the Defect Notice dated 22 May 2019 and the Refund Adjustment Order dated 23 May 2019 are set aside and the matter remanded back to the Respondent Authorities, to consider the refund application dated 13 May 2019 after giving an opportunity of hearing and after considering the submissions of the Petitioner pass a reasoned order in accordance with law - petition allowed by way of remand.
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2023 (5) TMI 234
Levy of penalty u/s 53 of the TVAT Act, 2004 - it is the contention of the petitioner that in the absence of a prescribed format as per Section 53(1) of the Act, 2004, the petitioner could not be made liable for penalty on failure to submit the audited report within the prescribed time - absence of notice before imposition of penalty - violation of principles of natural justice - HELD THAT:- The penalty imposed upon the petitioner for violation of Section 53(1) of the TVAT Act, 2004 suffers from lack of proper notice and absence of reasonable opportunity of being heard, as is required under Section 53(3) of the Act, 2004. A perusal of the assessment order clearly shows that the proceedings were initiated under Section 31(1) of the TVAT Act, 2004, but no separate notice was issued under section 53(1) of the Act, 2004 before imposition of penalty.
Without going into the other issue of absence of prescribed format for submission of audited return in terms of Section 53(1) of the Act, 2004, the impugned penalty imposed upon the petitioner amounting to Rs. 2,73,800.30 vide order dated 30.03.2022 (Annexure 3 to the writ petition) is quashed. However, it is made clear that except the penalty part, the rest of the assessment order remains intact - Petition allowed.
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2023 (5) TMI 181
Delay of 10 years for adjudicating the case - Liability of cess on bringing goods within the limits of Navi Mumbai Municipal Corporation - Section 152A of Maharashtra Municipal Corporations Act, 1949 - Dealer failed to produce relevant documents in support of the returns as filed - HELD THAT:- It is not in dispute that the petitioner-Company is a ‘dealer’ as defined by Section 2(16A) of the Act of 1949. Section 152A of the Act of 1949 empowers the Corporation to levy cess on the entry of goods specified in Schedule-A at the rates prescribed in the said Schedule. Section 152B indicates the manner in which incidence of cess occurs. The turnover from the first day of April of the financial year in which the Municipal Corporation decides to levy the cess is required to be taken into account. Section 152J prescribes for the production and inspection of accounts and documents as well as search of premises, seizure of books of accounts and goods, etc. Under Section 152K the Commissioner has the powers of a Civil Court. It may be noted that by virtue of Maharashtra Act XLII of 2017 Chapter XI-A and Sections 152A to 152O of the Act of 1949 have been deleted with effect from 01.07.2017.
On the Commissioner being satisfied with the returns furnished by a registered dealer for the relevant period he is required to assess the amount of cess due from the dealer on the basis of such returns. Under Rule 25(3) of the Rules of 1996, if the Commissioner is not satisfied with the returns furnished by a registered dealer and he thinks it necessary to require the presence of the dealer or the production of further evidence, he is required to serve on such dealer a notice requiring the dealer to attend and produce or cause to be produced all evidence on which the dealer relies in support of its returns or to produce such evidence specified in the notice - Under Rule 25(11) of the Rules of 1996 the Commissioner is required to issue notice in Form-H to a dealer to show cause why it should not be so assessed. The date for compliance with notice cannot be earlier than fifteen days from the date of service thereof.
Once it is shown that sufficient opportunity was given to a dealer to produce evidence on which he relies, the assessment is required to be completed either on the basis of the evidence produced by the dealer or on failure to produce such evidence, to the best of the judgment of the Commissioner. Both the contingencies namely, production of evidence as well as failure to comply with the terms of notice in Form-H, have thus been taken care of - There is no justification indicated by the Municipal Corporation for the failure on the part of the Commissioner to assess the amount of cess due from the Dealer to the best of the Commissioner’s judgment at least from 21.08.2013 till the reminder in Form-H was issued on 24.09.2019.
It is necessary for the Municipal Commissioner to complete the assessment under Rule 25(3) of the Rules of 1996 either on the date specified in the notice issued in Form-H or as soon as may be thereafter on the basis of evidence produced by a registered dealer. On failure of a registered dealer to comply with the terms of notice issued under Rule 25(3) of the Rules of 1996, the Commissioner has to assess to the best of his judgment the amount of cess due under Rule 25(4) of the Rules of 1996. Since assessment has to be undertaken at any time within three years from the end of the year in which the relevant period occurs as per Rule 25(5) of the Rules of 1996 if a dealer does not furnish any returns or on failure to apply for registration under Rule 25(7) of the Rules of 1996, it becomes clear that though there is no outer period fixed for completing such assessment, the same has to be completed within reasonable period. In the facts of the present case, the assessment has not been completed for a period of almost ten years from issuance of the initial notice in Form-H - the failure to complete the process of assessment under Rule 25(3) and (4) of the Rules of 1996 for a period of more than ten years from the date of issuance of the initial notice in Form-H would render the process of assessment liable to be quashed on the ground of unreasonableness and failure to complete the assessment for no justifiable reason. On that basis the assessment for the period from 01.04.2008 to 31.03.2009, 01.04.2009 to 31.03.2010, 01.04.2010 to 31.03.2011, 01.04.2011 to 31.03.2012 has not been completed within the aforesaid period of ten years which we have found to be reasonable period for completion of assessment.
It is held that since the Commissioner failed to complete the assessment for the relevant years within a period of ten years of issuing the initial notice in Form-H, the notice dated 24.09.2019 is quashed. Since the period of ten years from issuance of notice in Form-H on 30.10.2014 for the year 01.04.2012 to 31.03.2013 is yet to expire, it is held that the Commissioner is free to proceed to complete the assessment expeditiously and in accordance with law.
Petition dismissed.
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2023 (5) TMI 180
Refund of entry tax recovered by the State from the Petitioners - Constitutional validity of the Goa Tax on Entry of Goods Act, 2000 - want of legislative competence - contravention of Articles 14, 19(1)(g), 265, 301 and 304(a) of the Constitution of India - Petitioners challenge the impugned Act on the ground that the same purports to relate to Entry 52 of List II of the Seventh Schedule to the Constitution of India but, in pith and substance, relates to entries in List I and consequently, beyond the legislative competence of the State legislature.
HELD THAT:- The argument, based upon the local area and the consequent effect upon the legislative competence of the State, additionally stands answered by the decision of the Division Bench of this Court in Hindustan National Glass & Industries Limited [[2019 (3) TMI 969 - BOMBAY HIGH COURT]]. The Division Bench, in paragraphs 62, 63, 64, 65, 66, 67, and 70, has dealt with this issue and answered the same against the Petitioners and favouring the State.
The Division Bench has relied, inter alia, on the State of Kerala and ors. vs. Fr. William Fernandez and ors [[2017 (10) TMI 491 - SUPREME COURT]], in which the contention based upon such legislations being beyond the legislative competence of the State under Entry 52, List II of the Seventh Schedule, was rejected.
Having regard to the decision of the Constitution Bench in Fr. William Fernandez and ors, and Hindustan National Glass & Industries Ltd., and by following the reasoning therein - Petition dismissed.
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2023 (5) TMI 175
Refund of entry tax recovered by the State from the Petitioners - constitutional validity of Sections 2(g), 2(m), and Section 3 of the Goa Tax on Entry of Goods Act, 2000 as being ultra vires Articles 14, 19(1)(g), 265, 301 and 304(a) of the Constitution of India - HELD THAT:- The scheme of the impugned Act and the charging section stipulate that there shall be a levy and collection of tax on the entry of goods into the State of Goa into a local area for consumption, use or sale therein. Schedule I lists the goods taxable under Section 3(1) of the impugned Act - Section 3(2) of the impugned Act makes it obligatory for the dealer and manufacturers to pay the tax. Section 3(3) of the impugned Act provides certain exemptions from the levy of entry tax for the dealer alone regarding goods on which tax has been paid or becomes payable. Schedule II, read with Section 3(4), provides a general exemption on entry tax for certain goods.
Recently, in OCL India Ltd. vs State of Orissa and ors. [2022 (11) TMI 287 - SUPREME COURT], the Hon'ble Supreme Court considered the scope of interpretation of "local area" occurring under Entry 52 of List II of the Seventh Schedule to the Constitution. This was in the context of the Orissa Entry Tax Act, 1999, which defined local area to include industrial townships, including areas within the industrial township constituted under Section 4 of the Orissa Municipal Act, 1950, subjecting goods entering into such areas to entry tax - The Court held that reliance upon Diamond Sugar Mills Ltd. vs State of Uttar Pradesh [1960 (12) TMI 83 - SUPREME COURT] was misplaced because, in that decision, the Apex Court had to deal with a different set of facts. The levy on sugarcane imposed by the State of U.P. was on the incidence of entry into factory premises. The Court, therefore, correctly concluded that factory premises per se could not constitute a local area.
Further, the Hon'ble Supreme Court held that it is also a cardinal rule of interpretation that words of a taxing statute should be read in their ordinary, natural, and grammatical meaning. Further, in construing the words in a constitutional enactment that confers legislative power, a liberal construction should be placed upon them to have effect in their widest amplitude. The object of the levy, i.e., entry tax, is the regulation of entry of goods in a regular area for consumption, i.e., manufacture, use or sale. There is no dispute that entry of goods into an industrial area or estate is for their use for manufacturing or processing or the purposes of their delivery as their ultimate destination, i.e. for consumption, use or sale within that area. It could even be that the goods enter within the industrial area or estate as the ultimate point of destination for their use. In any case, the levy would be attracted because the incidence is the entry into the local area.
The limited surviving challenges in this Petition based upon the alleged violation of Articles 14, 301 and 304 or the entire State being declared as a local area and, consequently, the legislation being ultra vires for such reasons cannot be accepted - Petition dismissed.
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2023 (5) TMI 132
Stay on Interest on the amount of refund - HELD THAT:- Learned counsel appearing on behalf of the appellant-Revenue has stated at the Bar that the order of refund has been passed pursuant to the directions issued by the High Court and the officer of the Revenue Department was called in the Court by the High Court and the order of refund was passed by the Department. The aforesaid aspect shall be considered at the stage of final hearing.
To be heard with Civil Appeal No. 242 of 2018.
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